General Mills Earnings: Volume Declines Accelerate as Challenges Likely to Extend Into Fiscal 2025

Narrow-moat General Mills reported fiscal fourth-quarter organic sales declined 6%, a notable acceleration from the preceding quarter. The consumer environment was more difficult than we expected as volumes declined 6% and 7% in the North American Retail and Pet segments, respectively. For fiscal 2025, the company has guided toward organic sales growth of flat to 1% and adjusted operating profit growth between down 2% and flat in constant currency. This compares with our preprint forecasts of 3% and flat, respectively. We expect to reduce our $78 fair value estimate by a mid-single-digit percentage, roughly in line with the market reaction to the earnings release. The cut stems from a longer period of consumer weakness than we previously expected.